Funding assists counties in reducing property taxes
North Dakota’s legislative Budget Section today approved $25 million in Coronavirus Aid, Relief, and Economic Security (CARES) funds to counties, which is in addition to the $25 million approved in August. These funds will provide a second round of funding to local government for a total of ten months of law enforcement payroll reimbursement. Public safety payroll is considered an allowable expense to distribute CARES fund dollars. The law enforcement payroll reimbursement is purely the mechanism to deliver funds to local government; counties can use the funds as needed.
The North Dakota Association of Counties (NDACo) recently collected 2021 budget information that reveals that CARES funds have assisted North Dakota counties in delivering tax reductions. This illustrates that counties have acted prudently with property taxes in their use of the CARES funds received.
County commissions were struggling with how to budget for CY21 due to declining revenues and increasing responsibilities, both driven largely by the pandemic fight. The State Emergency Commission and Budget Section stepped in and allocated federal Coronavirus Relief Funds, and the results were noticed.
The initial allocation in August of $25 million for counties came at a perfect time to be incorporated into the process of revising preliminary budgets before final budget approval. At a time when many counties anticipated raising property taxes, and some raising them significantly, we have seen the opposite. Twenty-four counties lowered their property tax (mill) rate, and seven of those were more than double-digit percentage reductions. Even more surprisingly, fourteen counties were able to lower their total dollars of taxes collected. In addition, eleven counties were able to lower BOTH their mill rate and tax dollars collected.
NDACo Executive Director Terry Traynor said “The state/county partnership was evident in the understanding the Governor’s Office and the Legislature have for the interconnection of state aid and property taxes. This funding has been significant for counties, and more importantly, property taxpayers. Although some counties were unable to lower taxes due to local staffing and operational responsibilities, across the state taxpayers avoided significant increases to their county taxes during this time of economic challenge.”
The initial allocation in August of $25 million for counties came at a perfect time to be incorporated into the process of revising preliminary budgets before final budget approval. At a time when many counties anticipated raising property taxes, and some raising them significantly, we have seen the opposite. Twenty-four counties lowered their property tax (mill) rate, and seven of those were more than double-digit percentage reductions. Even more surprisingly, fourteen counties were able to lower their total dollars of taxes collected. In addition, eleven counties were able to lower BOTH their mill rate and tax dollars collected.
NDACo Executive Director Terry Traynor said “The state/county partnership was evident in the understanding the Governor’s Office and the Legislature have for the interconnection of state aid and property taxes. This funding has been significant for counties, and more importantly, property taxpayers. Although some counties were unable to lower taxes due to local staffing and operational responsibilities, across the state taxpayers avoided significant increases to their county taxes during this time of economic challenge.”
“We are incredibly grateful for the allocation of CARES Funds to Morton County. We recently approved our 2021 budget and were able to reduce our mill levy by 8.1% and the dollars we collect in property tax by 3.4%,” commented Morton County Chair Cody Schulz. “We were only able to do this because of conservative, needs-based funding and the peace of mind that the CARES funding would leave us with a reasonable cash reserve to deal with future emergencies.”
Ward County acted similarly, citing the use of CARES funds to lower mills for the 2021 budget and placing funds in reserve to manage budget shortfalls going forward. “With CARES funds we were able to lower our mills an additional 4.19 from what was approved in our preliminary budget, bringing our overall levy back to the same as what it was for 2020’s budget,” said Ward County Auditor Marisa Haman.
As counties are on the front lines of the coronavirus pandemic response, counties are experiencing unanticipated financial burdens. Public health employees have been directly involved in COVID-19 testing and contact tracing. Counties have seen dramatic COVID-19 impacts affecting elections. Jails and law enforcement, along with counties, have made investments in their facilities to provide safer environments to work and do business.
As all governments across North Dakota, Cass County has been impacted by the COVID emergency in various ways. Cass County Finance Director Mike Montplaisir highlights some of the impacts and costs associated. As with any workplace, cleaning efforts were enhanced, and workspaces were created to provide distance between employees and customers. In some of their newly remodeled offices that included adding glass to the counter area to create barriers and glass on the top of workstations to create barriers between employees. In other departments it meant moving employees to working from home. The remote work situations also come with associated IT costs. “Our big challenge this year was elections, first an all-mail primary election and then right now an election run partly by mail and partly by vote centers. In Cass County we opened six vote centers. Just the plexiglass to protect the workers was $9,000—not to mention the additional poll-worker time to staff the vote centers. The other big cost for Cass County was $70,000 for mailing ballots in the general election. Altogether, Cass County’s out-of-pocket, COVID-related costs have totaled over $350,000 of additional, unbudgeted expenditures.”
The Cass County Jail has been forced to house some prisoners in other counties to provide more segregation between prisoners. Cass County is making investments to provide for better handling of infectious diseases in the future. Critical are larger booking areas so that people from different law enforcement agencies and their prisoners are property separated as prisoners are brought in; more isolation cells that have negative air flows to prevent disease spread; and simply more capacity to handle more prisoners with diseases, so both prisoners and staff are kept safe.
“While addressing all these COVID impacts, Cass County was not only able to hold the line in taxes, we were able to reduce our mill levy by 2.23 mills or a little over $2 million dollars,” said Montplaisir. “We are very committed to reduce taxes where we can, while still providing necessary services to the public. The CARES Act funding has been a welcome relief as we struggle with some increased costs as we deal with COVID and try to reinvent how we can provide services in a changing world”.
Thanks to the Budget Section’s approval, counties will receive a total of $50 million in CARES funds and cities will receive a total of $70 million for law enforcement payroll reimbursement. Providing these funds to local governments will benefit property taxpayers across the state. North Dakota received $1.25 billion from the CARES Act.
Follow this link to see a county breakdown of the estimated $50 million for law enforcement payroll reimbursement: http://bit.ly/CARESestimate
